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Investing.com - RBC Capital has lowered its price target on Wix.com (NASDAQ:WIX) to $190 from $210 while maintaining an Outperform rating, citing margin pressure from the company’s vibe coding (VC) initiatives. The new target still represents significant upside potential from Wix’s current price of $101.70, which has fallen nearly 59% from its 52-week high of $247.11. According to InvestingPro data, Wix is currently trading near its 52-week low, with the stock having declined over 44% in the past six months alone.
The adjustment follows Wix’s challenging third-quarter results, where the firm’s Base44 vibe coding asset contributed significantly to bookings growth but is affecting margins more than initially expected. Despite these challenges, RBC noted that bookings beat expectations and accelerated, with fourth-quarter guidance revised upward. Wix has maintained a solid revenue growth rate of 13.22% over the last twelve months, with gross profit margins standing at 68.46%.
RBC highlighted that Wix is attracting a "distinctly different VC customer base," which the firm views as encouraging. However, the analyst expressed concern that Base44’s meaningful contribution to Creative Subscriptions might suggest the core business slightly missed expectations. InvestingPro analysis shows that despite these concerns, Wix remains profitable with a diluted EPS of $2.36 over the last twelve months and is expected to grow its net income this year. The company’s overall financial health score is rated as GOOD by InvestingPro’s comprehensive evaluation system.
The firm pointed to management’s commentary about potential near-term margin pressure as particularly concerning, noting that this doesn’t reconcile with better-than-expected TROI (time return on investment). Management’s indication that a return to leverage might not occur until late 2026 or even 2027 could disappoint investors.
RBC maintained its 2026 bookings estimate while making immaterial reductions to free cash flow projections. The new $190 price target is based on 15 times estimated 2026 free cash flow, with the firm noting that Wix now trades at approximately 8 times FCF.
In other recent news, Wix.com reported third-quarter bookings and revenue that exceeded analyst expectations by 1%. However, the company’s profit fell short, coming in 7% below Street estimates due to increased spending on compute resources and marketing for its Base44 offering. Despite the strong revenue performance, several analysts have adjusted their price targets for Wix.com, reflecting concerns over investment costs. Cantor Fitzgerald reduced its price target to $135, maintaining an Overweight rating, while Needham lowered its target to $140, citing reduced free cash flow estimates. Scotiabank also adjusted its target to $175, noting strong performance but highlighting costs related to AI investments. Citizens reduced its target to $185, pointing to concerns about free cash flow as the company focuses on growth investments for Base44. Additionally, Wells Fargo lowered its price target to $184, maintaining an Overweight rating amidst concerns about future operating income and free cash flow outlook. Despite these adjustments, analysts like Scotiabank and Citizens continue to express confidence in Wix.com’s market performance.
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